With the dearth of housing and a waiting list of thousands, campaigner Dave Wilson explores the implications of the council’s Whitefriars purchase:
What do you do with £75 million? You could buy 250 two bedroom flats – even in the centre of Canterbury.
The city council has around 2,700 people on its housing waiting list. So 250 flats would make a significant impact on reducing that list.
Obviously, therefore, the council has decided to spend £75 million…on the Whitefriars shopping centre. Its justification for this is that it will bring in revenue to support the council’s core activities, which face ever greater cuts because the normal source of their money – council tax and government grants – isn’t adequate.
Now I don’t actually have a problem with municipal enterprise, and investing to keep the burden on taxpayers down is obviously a good thing in principle.
But when so many of our citizens are lacking a home of their own, the mindset which prioritises buying a shopping centre over buying homes to rent is clearly flawed.
The city council say that it will take them 25 years to pay back the money they borrowed – that’s right, borrowed – and will bring in about £400,000 a year surplus to their bank account.
By my calculation, that means that the net rental income is assumed to be about £4 million a year.
This investment, though, ignores the fact that high street retail shopping is facing a massive decline – evidenced every week by closures in shops and restaurants – which might cause anyone sensible to consider whether a 25 year investment is really a good deal.
Clearly the people who sold to the council think they can do better elsewhere.
Against that, the “affordable” rental income – at 80% of market rates – on 250 flats would be around £1.8 million every year.
And you can look at that difference and think the city council made the right decision.
Or you can take the view that it is the council’s responsibility to provide housing and that should take priority, even if the return on the investment is lower – because the return won’t be zero.
Or, even better, that if they can borrow £75 million then they should borrow £150 million, and do both.
Either way, these skewed priorities reflect the reality of our council, also illustrated recently by its decision to give Serco a £300,000 subsidy and to spend over £9 million (borrowed, again) on the West Station car park: they’re far happier to provide for business than for residents.
And that, however you look at it, is obviously wrong.
Dave Wilson is a Labour Party member and community activist who has worked in and around local authorities for 35 years. He is a trustee of Kent Savers Credit Union and Westgate Hall.